"Kindle is a only a transitional reading device." A Lawyer Predicts Amazon's Future

This article , which came out in May 2011, seems prescient but says a lot that's controversial . Excerpt:

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I believe that what we are watching is Amazon rethinking the future of making money online. Kindle is a only a transitional reading device. It's a stop along the way toward a multifunction tablet, which is, itself, a stop along the way toward a cloud based service -- a service that stores book and music files remotely.

Some believe the Kindle advertising model, announced last month, is a first step toward a freemium business model. Marry the freemium model with a cloud based book service, and you have advertising supported books. You won't just being storing books that you purchased on Amazon's server, but, reading advertising supported ones. The latter bears some similarity to the way Dickens sold his novels -- serially, in installments or parts over time. The future of publishing is going to look more "tailored and personalized." Until the FTC clamps down on America's patchwork quilt of pro-advertiser privacy laws, revenue will flow from targeted behavioral ads.

1. Streaming is too unreliable for reading. People read in all kinds of places with no service, including on airplanes.

2. The value of streaming for e-books isn't there the way it is for music. If you want to listen to 8 hours of new music, you would need to buy 160 songs (assuming 3 minutes per song). At $1 per song, that is $160 to buy...so some sort of flat-fee subscription service might make sense.

If you want to read for 8 hours, you probably need one book (on average). At $13 for a new big 6 book, there may be some value in a subscription...but it will be less than the value music would provide, simply because the cost is less to begin with.

3. Free books in exchange for advertising won't work for tradpub books. It may work for 99c books...although people may still be resistant to ads for books, even cheap books.

It is easy to imagine a way to monetize books other than simply selling them. It is quite different to have the customers go along with it, however. It's also hard to make a lot of money on with ads - broadcast TV does it, but they are able to provide advertisers with tens of millions of viewers *in one hour*. Only the most elite authors have sold more than ten million books - and most of them took more than an hour to do so.

... and if the 'cloud' gets hacked and you lose your data ... or if your fancy new tablet fails or is out of warranty ... or if your password gets stolen ... or ...

What is the difference between having your data and purchases (rents, sorry) on your own prone-to-fail hard drive or your own prone-to-fail tablet? Lose a HD on either and you aren't online anymore ... unless of course we put all of the operating system on the cloud and just burn the boot process and wifi connection into a chip that "can't fail."

1. Streaming is too unreliable for reading. People read in all kinds of places with no service, including on airplanes.

And for those places, people will read books that they have downloaded, just like they watch Netflix streaming at home and watch movies they've downloaded on their laptops on airplanes. It will be another option , just like streaming and downloading movies are options. I agree with you that it will never be the ONLY option.

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2. The value of streaming for e-books isn't there the way it is for music. If you want to listen to 8 hours of new music, you would need to buy 160 songs (assuming 3 minutes per song). At $1 per song, that is $160 to buy...so some sort of flat-fee subscription service might make sense.

If you want to read for 8 hours, you probably need one book (on average). At $13 for a new big 6 book, there may be some value in a subscription...but it will be less than the value music would provide, simply because the cost is less to begin with.

You could make the exact argument about movies-yet somehow, there is a flourishing movie rental/streaming market. Pricing will be key, as well as which books may be in the subscription pool. That will be worked out over time, the way it was for movies.

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3. Free books in exchange for advertising won't work for tradpub books. It may work for 99c books...although people may still be resistant to ads for books, even cheap books.

Or not. I grew up with all kinds of ads in comic books and there are ads in magazines to this day. There were ads in paperbacks , too. Free, ad-supported games in which you pay to remove the ads are commonplace and widely accepted.
How the ads will be implemented is an issue. There are people who will never accept ads, no matter how they are implemented, but that's the minority. I discuss this HERE.

Actually, I thought that the most controversial statement was that the Kindle was just a transitional device. I thought millions of Kindle owners would be spitting fire at the idea that their beloved e-ink reading devices were not the end and pinacle of the ebook reading experience and would be replaced by tablets.

FWIW, I think that there will be another generation of e-ink readers, may be two. But the focus is clearly shifting toward tablets. The shift may not be to "general purpose " tablets, though , but to "reader tablets" tied to a particular store. There is the Nook Color; there will be a Kindle tablet, modelled on the NC; there may even be a Kobo tablet, in time.

More clueless device association from a non-reader who somehow hasn't bothered to look at the timeline of display technology. It has a display, hence it must b 4 Fruit Ninja.

Actually , I think magazines and not Fruit Ninja is what's driving the shift. The women who are reading these e-books also want to read Glamour and Cosmopolitan on their devices. The success of the NC makes that quite clear.
E-ink readers don't do fashion mags. hey also don't do children's books -another big market that appeals to the person who most often makes the family's buying decision. Advantage tablets.

... and if the 'cloud' gets hacked and you lose your data ... or if your fancy new tablet fails or is out of warranty ... or if your password gets stolen ... or ...

What is the difference between having your data and purchases (rents, sorry) on your own prone-to-fail hard drive or your own prone-to-fail tablet? Lose a HD on either and you aren't online anymore ... unless of course we put all of the operating system on the cloud and just burn the boot process and wifi connection into a chip that "can't fail."

The primary difference is that I can access my material at any time and in any place I choose and I normally have at least two full copies of all of my data on at least TWO separate HDs as well as a lot of DVDs... and it's all under my control, I don't need to rely on having internet access (whether cabled, Wi-Fi or 3G) to a third party server farm which is also prone to failure despite claims to the contrary...

I see no reason there can't be Nook-sized tablets or slates some day with lit e-ink-like color displays always broad-band connected to the Internet yet powerful enough to run programs and store files locally. There won't be any real advantage in having dedicated e-readers except perhaps cost.

Having said that, there will be a good market for e-readers for a few years yet.

Actually , I think magazines and not Fruit Ninja is what's driving the shift. The women who are reading these e-books also want to read Glamour and Cosmopolitan on their devices. The success of the NC makes that quite clear.
E-ink readers don't do fashion mags. hey also don't do children's books -another big market that appeals to the person who most often makes the family's buying decision. Advantage tablets.

Yeah, but then there's a swath of individuals who could care less about reading glossies on anything put paper.

If you ask me, magazines are disposable. Books are not.

Unless they find a way to make color E-ink...I think there's always going to be a place in the universe for straight-up e-readers.

The author seems to see eink ... tablets ... cloud as some sort of progression. Yet the first two are consumption tools and the latter is a delivery mechanism. The Kindle is already a "cloud" device in the sense that users need only store some content on the Kindle and leave the rest on (or "return" the read items to) the cloud. My Kindle 3 has a handful of content from non-Amazon sources and some current Kindle books I've purchased and haven't read yet. Once I read something, I delete it from the Kindle.

I don't see any need to fuss much with the ebook purchase model: some set fee per title obtained which flows back to the retailer, publisher and author. Except for niche markets, any subscription model gets to be clumsy.

The monetization, however, can come from charging for the cloud. Amazon does this now by charging publishers 15¢/MB "delivery" charge per purchase (regardless of the number of times a consumer redelivers it across his/her multiple registered devices). Another opportunity is advertising (currently being used to subsidize the device but why not pop-up ads when transferring items to/from the cloud?).

And I agree that at around $100, eink as a dedicated reader is a pretty strong value proposition. There's a camera built into virtually every smartphone these days but people continue to buy dedicated digital cameras. Tablets and other devices will take a chunk of the market but eink is likely to hold value in being simple, inexpensive and convenient.

Eink survived by getting cheap enough, fast enough. A few years from now, tablets like the Nook Color will go for less than $100. at that point, there will be little reason for eink beyond those who simply cannot read on an LCD screen....which is a lot smaller group than many here believe.

Eink survived by getting cheap enough, fast enough. A few years from now, tablets like the Nook Color will go for less than $100. at that point, there will be little reason for eink beyond those who simply cannot read on an LCD screen....which is a lot smaller group than many here believe.

Don't believe me? How is the 10" Kindle Dx selling these days?

Lee

There's already people who own both -eink reader and fully fledged tablets. People like me. I'm not about to shift my reading habits from my reader to my tablet. It's not necessarily about "cannot read" on the LCD screen, it is the preference for long-term reading (several hours at a time) on the eink screen. I like to browse the web and read news stories on my tablet..... but when I'm ready to read a book, i really really prefer the eink screen.